5 health insurance scams to report

As the March 31, 2014, deadline looms for most Americans to have health insurance, consumer advocates are warning people to beware of scam artists.

After Congress passed the Affordable Care Act in 2010, reports surfaced of scammers posing as insurance agents or government representatives to sell bogus policies or trick people into handing over bank account information.

Now that the health insurance marketplaces are open, officials predict scammers will kick into high gear.

With any big change comes confusion, and the U.S. health care system hasn't seen a change this big since Medicare was introduced almost 50 years ago. Confused consumers make ideal prey. The most vulnerable are young people who are first-time health insurance buyers, seniors and recent immigrants, says Dennis Jay, executive director of the Coalition Against Insurance Fraud.

"When opportunity presents itself, crooks come out of the woodwork," he says.

The National Association of Insurance Commissioners urges people to watch for red flags.

Avoid these five scams:

1. Bogus websites

Some fake websites pretend to be state- or federally run health insurance marketplaces. The legitimate marketplaces opened Oct. 1 and are selling 2014 health plans. The fake websites steal your personal information or your money, or refer you to unscrupulous agents.

How do you tell the real thing from an imposter?

Find your state's marketplace by going to the U.S. Department of Health and Human Services website, Healthcare.gov. Click on "Apply now" and then select your state on the next page. The Healthcare.gov site will provide a link to the marketplace.

2. "Obamacare" and Medicare cards

The law requires most Americans to have health insurance in 2014 or pay a tax penalty. But you don't have to get a government health insurance card or a new Medicare card.

Scammers in some states have called consumers or gone door to door, claiming to have their new "Obamacare" or new Medicare cards ready to send them. All they need from consumers, they say, is bank account, credit card, Medicare or Social Security numbers.

If you have Medicare, you don't have to purchase insurance again because you're already covered. And there is no such thing as an Obamacare card - or legitimate agents selling door-to-door.

3. Phony navigators

The federal government provided grants to states to hire temporary consultants, called navigators, to help consumers apply for coverage through the new marketplaces. Insurance regulators are concerned that some swindlers might pose as navigators to steal consumers' information.

Navigators are not allowed to recommend specific plans, and they don't get involved with payment. Navigators must be certified.

4. Fake health plans

Sales of phony health plans come in waves about every 10 years, Jay says. A 2004 U.S. Government Accountability Office study found that some 200,000 consumers from 2000 to 2002 bought bogus health plans.

State regulators think we could be due for another wave, especially with so many people scrambling to get coverage by 2014.

Follow these tips to avoid getting duped:

Verify the insurance company and agent are licensed through your state's insurance department.

Don't answer unsolicited emails or buy anything from unsolicited callers. Don't believe any callers claiming to represent the government. Navigators and government officials do not call consumers to sell them health insurance.

Be on the alert for scare tactics. Some scammers have reportedly said consumers will go to jail if they're uninsured. If you're uninsured next year and don't qualify for any exemptions from the requirement, you will face a tax penalty -- $95 per adult, or 1 percent of household income above the tax filing threshold, whichever is greater. You won't go to jail.

Beware of hard-sell pitches. Don't buy from anyone who says the offer is good for only a limited time.

5. Fraudulent Medicare sales pitches

This year's open enrollment season for Medicare, when beneficiaries review their coverage and make any necessary changes, overlaps with the operation of the new health insurance marketplaces.

The marketplaces don't sell Medicare health or drug plans, but with all the talk about them opening, scam artists might try to con seniors into thinking they need to buy additional coverage.

Remember, you're already covered if you have Medicare, and you don't have to buy more insurance to comply with the law. You're also already covered if you have Medicaid or buy health insurance through work.

Suspect a scam? Call the police and your state insurance department.

"You've got to report it because you're saving the next person from becoming a victim," Jay says.